More global rebalancing

Bloomberg: More and more global investors are boosting exposure to U.S. alternative assets in spite of volatility in markets as bond yields remain compressed, Jones Lang LaSalle said in its 4Q Investment Outlook report. Of U.S. commercial real estate buyers, 15.4 percent were from offshore last year, compared with 6.4 percent in 2007, according to JLL data.

“Not only Korean funds but investors globally are interested in mezzanine investment,’’ said JoAnn Hong, a research and consultancy director at Savills Korea Co. in Seoul. “Local investors feel relatively comfortable with mezzanine debt as it’s an easier approach to overseas real estate,’’ compared with equity holdings, she said.

Alternative investments such as real estate, private equity and hedge funds were the best-performing asset class in 2014 for South Korea’s biggest investor National Pension Service. They returned 12.5 percent, compared with a 5.25 percent gain for the service as a whole.

Fine, but foreign investors need look at the relative rise in foreign buyers, 15.4% today vs 6.4% in 2007. That means foreign buyers are marginally setting the price, they drive it up and they let it fall.